Unemployed? Underemployed? Chronic credit card user? Unexpected emergencies? There are many ways for debt to add up, and only a few ways to subtract it. If you find yourself shrinking every time your phone rings, then you probably have no idea what you owe, what your credit score is, or how to turn your world right side round.

You may think you should get your finances organized before you get a credit report, but the other way around may put you in a better position.

First Things First

You need to get your credit report. Although you may already know that you credit score is rubbish, you need a few more details than that. There may be creditors who have not been able to locate you since your last move. Those bills did not disappear; you did. You still owe that money. Your credit report will also let you know how long since you last paid that nagging store account.

• Does a credit report seem like an unnecessary expense? Reports are available for free online. It may only be one a year, but that is a start.
• Does it make you anxious? So do sleepless nights. Facing your fears is the best move you can make.

Now What?

Sitting with that dreaded credit report in hand? Resist the urge to file it away, but go ahead and cry a little if you feel the need. Take a close look at your report. Once you get over the shock, follow these steps:

• File your bills in the same order as your credit report; this will help to tackle the problems.
• Flag the creditors that have flagged you; those that have given you an awful assessment will need to be dealt with urgently.
• Note any companies that report up to date payments. You do not want to ignore these creditors now.

You may not realise it, but you have just prioritized your creditors. Now you need to start making arrangements to improve your score.

The Way Forward

If you have been able to pay certain bills on time every month, keep at it. Then focus on your other creditors. The more red you see in a line, the longer it will take for you to see it without flinching. Every creditor in red counts against your score while every green mark is a positive. You should correct one line at a time if you cannot afford to fix them all at once.

It may be the smallest balance, such as that forgotten x-ray bill, or the book club you forgot to cancel. The idea is to remove all your unsecured debts, and create lines on your credit report that do not torment you, nor interfere with your future.

Although many argue for paying the debt with the highest amount of interest first, you can improve your credit rating by removing smaller stains from your credit report, while creating a space to pay off your larger bills later.

Author’s Bio: Steven Garcia is a well known author and writes articles related to finance. For more information on the same visit the website CreditReport.org.